Is 2019 your year for a new mortgage? Looking at buying a house or maybe refinancing your current mortgage? Maybe your current 5 year mortgage is up for renewal and you’re not looking forward to what your new rate will be. Well, there might be some short-term interest rate relief coming as soon as mid January.
The five-year Government of Canada bond– which usually dictates fixed rate mortgages – has been decreasing over the last three months. In fact, the bond rate on January 7th 2019 is 1.88% which is substantially lower than the rate on October 5th 2018 which was recorded at 2.48%. The current 1.88% is lower than any bond rate we saw in 2018. So what does this mean for you and your wallet?
Even though the bond rate has fallen, the fixed mortgage rates have not. We should see the banks and lenders lowering their fixed mortgage rates in the next few days.
Will this actually happen?
It’s a waiting game but competition among the banks will prevail. With decreasing demand for housing in many parts of Canada, lenders are struggling to lend the money out fast enough. As soon as the first lenders lowers rates, the rest should follow suit.
What should you do?
It depends when you need a new mortgage. If your need is within the next few months, it’s best to start the process today as there is no certainty that rates will drop. If you start the process and rates fall, you should be able to lower the rates as this change happens, so no risk to you.
If you have some time before you need to start looking, We would recommend having a mortgage professional track the changes for you and provide you with options.